There's been a lot of chatter about the term value proposition. While I'm pleased with the level of conversation, I'm noticing a gap in sales professionals or entrepreneurs understanding specifically what their value proposition is, how to identify it via their product or services and then communicating it to their existing or potential customers.
Because of this, they are constantly battling customers with price discounts, not differentiating themselves from the competition, working harder to gain customer awareness, etc.
This article will help you identify your value proposition based on your product, service, or solution to better communicate it to your customers.
Your value proposition is not your mission or vision statement.
Before I go deeper into a value proposition, let me start with this. Far too often, when I ask sales and marketing professionals and entrepreneurs to write down their value proposition, they quote their mission or vision statement 🤦🏽♂️.
Mission and vision statements centre around you and your company and its direction. However, your value proposition focuses on the customer and how you support them in achieving their goals and objectives.
What is a Value Proposition?
* Definition: "A value proposition is an end benefit a customer receives after purchasing your product, service or solution."
We can see a clear difference between a value proposition and a mission statement from the definition above because it's more customer-focused.
Professionals have difficulty identifying how their value proposition benefits the customer and communicating it to them in their sales pitch, proposal, talk track, presentations, etc.
While there are many different value proposition categories, we will be sharing five core value proposition categories that every product, service or solution provides.
5 Value Proposition Categories
All products, services or solutions offer five (5) or a combination of the following five categories;
- Productivity
- Profitability
- Image
- Experience
- Convenience
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1. Productivity
Solutions/services that help customers improve their output, reduce the amount of time in getting things done, or help them get things done faster and more efficiently are solutions with a productivity value proposition.
A good industry that represents this is the technology industry; most tech solutions offer users the ability to get more done in a shorter space timespan.
Another good example is the simple role of a car wash. This service provider takes up the task of washing the car for you while you get the opportunity to use that time for something else.
Productivity is a key value add for any customer, and once it's identified that this is important to customers, and should be used to leverage or pique their interest.
"We help you save..." - General statement.
2. Profitability
Have you ever seen or heard the above statement anywhere? As simple as it seems, it's a value proposition statement.
Any solution or service that helps clients improve monetarily is connected to the profitability value proposition category. But it does not just have to be banks and insurance companies that offer profitable value solutions.
Service or solution providers that help customers reduce their costs, save money, or impact their bottom line, fall into the profitability value proposition category. Financial service portfolios would be an excellent example of this; however, if we look at customers that purchase equipment like lawnmowers, weed wakers, etc., to generate revenue, this falls into the profitability side of your value proposition offering.
3. Image
Image is always an interesting component in the value proposition offering. A company's image is important in how its customers (current/future) see them. That image, however, should not always be looked at from an aesthetic standpoint.
Let's continue with the previous example of the lawnmower. It stated that the customer purchased the lawnmower to provide a service to his customers. At some point, that lawnmower will require maintenance. If the service provider of the lawnmower defaults in their ability to service the equipment promptly, this will now affect the landscaper's ability to serve his customers.
It will affect his reliability and credibility, prompting customers to cancel or take their business elsewhere, ultimately affecting his productivity and profitability.
Notice how image due to poor service delivery also affects your customer's productivity and profitability.
"My experience with them was not very good", - said the customer.
4. Experience
The importance of the experience factor is often overlooked as a value proposition category. Customers measure their willingness to continue doing business with an organisation based on their experience while interacting with that service provider or the satisfaction received while using the item.
The experience factor of the value proposition is measured at the end of any interaction. A customer's experience while calling your company to ask about a product/service can determine them closing an opportunity with your organisation.
Pro Tip: Experience can positively or negatively affect an organisation's "image", which eventually affects profitability.
5. Convenience
Convenience in the value proposition offering can be summed up as the customer's "ease of doing business" with you. This is one of the most critical components in the five categories.
Convenience looks at the entire business model, from the customer being able to research or find your website to making a call, all the way to when they pay for your product or service. The convenience component in your value proposition affects the buyer's journey.
Customers are looking for C.A.S.H, but not in the true sense of the word.
They are looking for a service that is
A) Convenient
B) Actionable
C) Speedy
D) Hassle-Free.
If we look at these five factors from the standpoint of your business, what does that look like for the customer?
It's important to note that this links back to the customer experience, which has links to the other value proposition factors.
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In closing, it is essential to understand what you offer and how your team (sales & marketing) communicates that to customers is essential. Without this understanding, your offering will not be attractive, making business harder to attain/attract business.
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